Business
Trading Update & Structure Update
Trading Update & Structure Update.
About this update from Ekf Diagnostics Holdings Plc
[{"type":"text","content":"\n \nRNS Number : 6548E EKF Diagnostics Holdings PLC 10 May 2017 \n\n \nThis announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR).\n \nEKF Diagnostics Holdings plc\n(\"EKF\", the \"Company\")\n \nTrading update & \nUpdate re: possible demerger and share buyback \n \nEKF Diagnostics Holdings plc (AIM: EKF), the AIM listed point-of-care business, wishes to update shareholders on its current trading and the proposals it set out in its announcement on 20 March 2017. \n \nTrading update\nThe Company is pleased to announce that trading in the first quarter of the current financial year was comfortably ahead of budget. The strong start to the financial year is entirely attributable to organic growth. However, whilst the Board remain optimistic about the Company's prospects for the full year, there can be no guarantee that this will continue for the remainder of the year given the relatively short lead time on new orders.\n \nIn addition, as anticipated in its announcement on 9 January 2017, the Company was net cash positive in the first quarter of the 2017 financial year following continued strong cash generation.\n \nPossible demerger and share buyback\nThe Directors are continuing to evaluate plans under which they would split the Company into two separate legal entities based on the business divisions, namely Point of Care and Lab Diagnostics. As previously announced, whilst both these business divisions are valuable in their own right, the Directors consider that separating them into distinct legal entities represents a better route for shareholders and one under which they are more likely to achieve a fair reflection of the value of each separate business.\n \nWhilst tax advice and work on the possible deal structure is ongoing, it is the Board's latest understanding that the demerger can be carried out at subsidiary level and therefore, initially at least, remain within the existing EKF group. EKF Diagnostics plc will remain as the ultimate parent company of both legal entities and importantly also remain quoted on AIM. Further, whilst the initial demerger can be carried out intra-group, the Board's current expectation is that the Lab Diagnostics business will nevertheless be spun-out of the EKF Group at an app...